Latest news with #Rbi
Time of India
5 days ago
- Business
- Time of India
29_Mum_MS_RBIregulation
Rbi to formalise expected credit loss framework, project finance and issues guidelines to curb mis selling of financial products RBI will formalise the expected credit loss (ECL) framework for banks and issue guidelines to curb mis-selling of financial products by regulated entities (REs), including third-party offerings. These reforms, highlighted in its annual report, are part of RBI's broader effort to enhance financial sector resilience amid growing risks from technology, cyber threats, and climate change. The ECL framework marks a shift from the current incurred loss model to a forward-looking approach, aligning Indian banks with global norms. This transition, long in the works, is expected to improve credit risk recognition and provisioning discipline, potentially increasing short-term provisioning but making bank balance sheets more shock-absorbent over time. RBI conducted impact studies in phases since 2022 to assess readiness and calibrate implementation. Also on the cards is the implementation of new project finance guidelines, which were proposed earlier but were deferred from being implemented in FY25 by the new governor Sanjay Malhotra after he took charge. The reforms proposed in the last fiscal include increasing provisions on delayed projects by as much as 5% The planned mis-selling guidelines follow rising concerns over aggressive sales practices, particularly the cross-selling of insurance and investment products often to senior citizens to whom these products are not suited. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 5 Books Warren Buffett Wants You to Read In 2025 Blinkist: Warren Buffett's Reading List Undo The new rules will hold REs accountable not just for their own products but also for those sold through third-party tie-ups, with stricter conduct norms and disclosure standards. The department of regulation will also issue final norms for co-lending arrangements, revise securitisation guidelines for stressed assets, and release updated rules on income recognition and asset classification. As part of its Basel III rollout, RBI will issue credit risk norms, finalise market risk guidelines, and update disclosure requirements. Climate-related risks remain a key focus. RBI will publish disclosure norms, launch a climate risk data system, and issue supervisory principles. It will also review the green deposits framework and issue norms for sustainability-linked loans. Other planned reforms include revising internet and mobile banking regulations, setting differentiated norms for Type I NBFCs, and digitising regulatory processes through the new Regulatory Application Management System (RAMS). A consolidation of existing circulars into thematic master directions is also underway. The department of supervision will strengthen liquidity stress testing, tighten oversight of payment and small finance banks, and improve monitoring of digital infrastructure uptime. For urban cooperative banks and NBFCs, RBI will consider migrating them to risk-based supervision and review AML practices. A thematic review will examine whether NBFCs are adhering to interest rate caps set by RBI. RBI's fintech arm will expand central bank digital currency pilots, add B2C features to the unified lending interface, and upgrade its fraud detection tool It will also frame standards for the ethical use of AI in finance. Consumer protection will be reinforced through an overhaul of the ombudsman scheme and issuance of a new grievance redress framework. RBI will also upgrade its complaint handling system. The financial stability department will develop liquidity stress tools for NBFCs, extend stress testing to cooperative banks, and model climate transition risks in carbon-heavy sectors. It will also build a growth-at-risk model to assess future economic vulnerabilities. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
5 days ago
- Business
- Time of India
29_Mum_MS_RBIANNUAL
Rbi anticipates indian economy to grow 6.5% in 2025 26 with inflation stabilising at 4% Reserve Bank of India (RBI) anticipates the Indian economy to expand by 6.5% in 2025-26 and inflation to settle at 4.0%. In its Annual Report for 2024-25, the central bank stated, "Amidst a challenging global economic environment, the Indian economy exhibited resilience during 2024-25, supported by robust macroeconomic fundamentals and proactive policy measures. " It warned, however, that risks to growth and inflation remain due to factors such as "the pace of disinflation losing momentum; elevated public debt across several economies; protracted geopolitical tensions; heightened trade tensions; financial market volatility; and climate shocks." "Financial markets may exhibit sporadic episodes of volatility triggered by turbulent global financial markets in the wake of heightened uncertainty regarding the evolution of trade tariff policies, among others," the RBI said. While India's domestic outlook remains firm, "uncertainty about global trade post-protectionist measures, protracted geopolitical tensions, and global financial market volatility pose downside risks to the growth outlook and upside risks to the inflation outlook. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Giao dịch CFD với công nghệ và tốc độ tốt hơn IC Markets Đăng ký Undo " The "increasing incidence of climate shocks as seen in recent years, however, warrants careful monitoring of the food price outlook." The report stated that "Policymakers face the daunting task of suitably calibrating monetary and fiscal policies to support growth while safeguarding financial and macroeconomic stability." Although market volatility may continue in episodes, the Current Account Deficit (CAD) "would remain eminently manageable in 2025-26." The services sector, it said, remained the "mainstay of aggregate supply," and "The production linked incentive (PLI) scheme helped to steer growth across several key manufacturing industries." The banking sector, according to the RBI, "has been resilient, although heightened global uncertainties underscore the importance of proactive risk management." The report noted that "Despite some moderation, NBFCs remain significantly dependent on banks for funding, underscoring the need for greater diversification of their funding sources." "The Indian economy is poised to sustain its position as the fastest-growing major economy during 2025-26. " This momentum is expected to be driven by "pick-up in private consumption, healthy balance sheets of banks and corporates, easing financial conditions, and the govt's continued thrust on capital expenditure." "The easing of supply chain pressures, softening of global commodity prices, and higher agricultural production on the back of a likely above-normal south-west monsoon augur well for the inflation outlook in 2025-26." Agriculture, "supported by an above-normal south-west monsoon and several productivity-enhancing govt policies," is likely to perform well in 2025-26. Manufacturing is "expected to gain further traction in 2025-26 supported by improvement in domestic demand, higher capacity utilisation, healthy balance sheets of corporates and banks, and consumer and business optimism." "The construction sector is also expected to continue its robust performance in 2025-26 aided by increased allocation for Pradhan Mantri Awas Yojana (PMAY). " On the external front, the report projects "Global merchandise trade volume is projected to contract by 0.2 per cent in 2025" under the current tariff regime. "India's export sector is also expected to encounter some headwinds from rising geopolitical tensions, inward-looking policies, and the risk of a potential tariff war among major economies." Still, "India's participation in 14 free trade agreements (FTAs) and six preferential trade agreements (PTAs), along with the new trade deals under negotiation with the US, Oman, Peru, and the European Union (EU) may support growth in trade." In the financial sector, "all payment system participants were advised to review their payment systems/devices and make necessary modifications to enhance their accessibility to persons with disabilities." The RBI also noted that "Regulatory efforts also took centre stage on strengthening fraud reporting mechanisms and encouraging information security preparedness, with an emphasis on cyber resilience" and "To combat the increasing instances of fraud in digital payments, the Reserve Bank proposed to introduce an exclusive internet domain for the banks in India in the form of ' on February 7, 2025. " It added that "Going forward, it is also proposed to have an exclusive domain for other non-bank entities in the Indian financial sector in the form of ' Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
5 days ago
- Business
- Time of India
29_Mum_MS_RBISURPLUS
Rbi reports increase in surplus transfer driven by foreign exchange gains in fy25 MUMBAI: Earnings from foreign exchange operations helped the Reserve Bank of India (RBI) report a 27% jump in its surplus transfer to the central govt for FY25, with revenue coming from both foreign currency assets as well as profits from the sale of dollars in the Indian markets. The surplus, also termed the available balance for transfer, rose to Rs 2.7 lakh crore in FY25 from Rs 2.1 lakh crore in FY24. Overall interest income rose by 12% to Rs 2.11 lakh crore, while gains from foreign exchange transactions contributed to a 47% jump in other income, which stood at Rs 1.28 lakh crore. The RBI's total income for the year increased by 23% to Rs 3.38 lakh crore, mainly driven by a 29% rise in interest earnings from overseas assets to Rs 1.33 lakh crore. However, part of the money was used by the RBI to strengthen its financial buffers. The Contingency Fund rose by 27% to Rs 5.42 lakh crore, following a Rs 44,862 crore provision to align its Available Realised Equity (ARE) with the 7.5% target under the Economic Capital Framework. The ARE rose nearly 25% to Rs 5.72 lakh crore, while the Asset Development Fund remained unchanged at Rs 22,975 crore. Domestic earnings, however, declined. Interest income from local investments dropped nearly 10% to Rs 77,327 crore, largely due to lower returns from rupee securities. Other income from domestic operations fell by 20% to Rs 2,143 crore. Total expenditure went up by 8% to Rs 69,714 crore, mainly due to higher costs for printing currency and employee benefits. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
